Fraud Is Not Enough

Is fraud enough to claim you suffered damages? Consider:

“A unanimous U.S. Supreme Court refused on Tuesday to make it easier for disgruntled investors to sue companies and seek damages in certain securities fraud cases…The high court overturned a ruling that companies can be sued for misleading statements that inflate their stock, even if the stock’s subsequent decline is not directly tied to the company’s later “corrective” disclosure of the fraudulent misrepresentation…”A private plaintiff who claims securities fraud must prove that the defendant’s fraud caused an economic loss,” Justice Stephen Breyer said in the court’s opinion…Dura investors said they should recover for losses from a precipitous stock drop, arguing that the company knowingly made false statements about the device’s prospects…”We consider a Ninth Circuit holding that a plaintiff can satisfy this requirement simply by alleging in the complaint and subsequently establishing that the price of the security on the date of purchase was inflated,” Breyer wrote. “In our view, the Ninth Circuit is wrong.”
AP Wire

It seems to me the Supreme Court is essentially saying that even though Enron, for example, might have been a sham, you still bear responsibility if you did not exit as the share price dropped from $90 to pennies.